Friday, March 31, 2023
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
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Full year financial results. Sierra reported a 2022 adjusted net loss attributable to shareholders of $23.1 million or $(0.14) per share, compared with adjusted earnings of $21.6 million or $0.13 per share in 2021. Adjusted losses per share for the fourth quarter and full year 2022 were less than our estimates of $(0.07) and $(0.17), respectively, due in part to higher fourth quarter revenue and modestly lower cost of sales. Adjusted EBITDA fell 88% to $13.0 million compared to $104.7 million in the prior year. Annual copper equivalent production fell 29% due to lower throughput and grades.
2023 Guidance. Management’s focus has been to stabilize operations following challenges experienced in 2022 and to return to higher production levels on an economically sustainable basis. Sierra forecasts 2023 copper equivalent production in the range of 74.3 million to 83.3 million pounds. As of the end of March, the Bolivar mine is operating at 3,070 tonnes per day and is expected to gradually ramp up to 5,000 tonnes per day by year end. The Yauricocha mine is expected to operate at 2,375 tonnes per day throughout 2023. Management considers the Cusi silver mine to be a non-core asset and it was excluded from guidance.
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